Legal Question in Bankruptcy in New York

being told to return debt payment by person filing bankruptcy

I received a payment from debtor, my former fiancee, 11/22/04, who filed for bankruptcy 10/14/05.

I had proposed to her but we had agreed not to marry. I continued to help her finanacially, with about half the amount considered a loan, the other half, a gift.

I received the following notification: as debtor's former fiance I am a non-statutory insider, and because repayment occurred within one year of the bankruptcy filing it is voidable as preference under Bankruptcy Code Section 547.

What do I have to do? This is so wrong --

Thank you.


Asked on 2/09/06, 8:14 pm

2 Answers from Attorneys
Andrew Nitzberg Andrew Nitzberg & Associates

Re: being told to return debt payment by person filing bankruptcy

First, no one believes you have done anything wrong here and you are subject to no action other than it is possible that you will be asked to give back the money that she paid to you. She is not saying you did anything wrong and she did nothing wrong by giving you the money.

You can defend on the basis that your 'relationship' terminated long before she filed for CH7. In addition, it is unlikely that anyone will chase you down for the money (but it is possible).

It is best to meet with a lawyer for a consultation and look into the matter in a little more detail (dates, amount of money, and her CH7 papers).

If you would like to meet with me, then it is best to schedule an appointment by email.

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Answered on 2/13/06, 2:03 pm
Jacob Silver Attorney At Law

Re: being told to return debt payment by person filing bankruptcy

The Trustee may bring an action against you in Bankruptcy court to try to reclaim the funds paid to you as repayment on the loan.

It really depends upon how much money is at stake, and an attorney could help you settle or litigate this matter.

Best of wishes

New York Bankruptcy Attorney

http://www.silverbankruptcy.com

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Jacob Silver

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Answered on 2/10/06, 11:52 am


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